Rotation tool not tilting
Select the armature and go to the "object" tab on the right side of the screen (orange box) and tick the option that says "In Front" (it's under "Visibility" or "Viewport Display" or something). This will always draw the bones in front of the mesh.

Change your rotation space to "Local" and pivot to "Active Element" at the top of the screen. With the armature selected, press CTRL-TAB to enterms pose mode. At the top of the screen, click the gizmos icon to bring up the drop down menu. Make sure the Rotation gizmo is activated.

Now you can see which axis your rotation is affecting by clicking and dragging the colored circles.